Definition of "Umbrella reinsurance"

Naomi  Campbell real estate agent

Written by

Naomi Campbellelite badge icon

Coldwell Banker Residential

Protection for all classes of business including automobile, fire, general liability, homeowners, multiple peril, burglary, and glass, by combining the contracts for these classes of business into one reinsurance contract. This enables the cedant to obtain reinsurance more cheaply, with greater capacity, and with greater spread of risk. An umbrella reinsurance contract is offered to one set of reinsurers who all take a fixed percentage of every treaty in the contract. One reinsurer may take 5% across the board, another may take 10%, and so on, until the umbrella contract is totally placed. All the treaties that compose the umbrella contract are written as one block of business; hence, the reinsurers are prohibited from choosing which treaty they want to reinsure. By combining all the reinsurance treaties into one contract, if a catastrophe loss results, each reinsurer will assume only a percentage of the loss instead of assuming the entire loss by itself.

image of a real estate dictionary page

Have a question or comment?

We're here to help.

*** Your email address will remain confidential.
 

 

Popular Insurance Terms

Insurance company that is a member of a rating bureau. The insurer usually joins such an organization when its statistical experience in a given line of insurance is not sufficient for it ...

Type of guaranteed investments contract in which the interest credited is adjusted on a periodic basis to reflect the investment earnings of the underlying assets of the contract. ...

Use of new rate structures by an insurance company without first obtaining approval of a State Insurance Department. ...

in property and casualty insurance, termination of a policy because of failure to pay a renewal premium. in life insurance, termination of a policy because of failure to pay a premium and ...

Amount of the increase in the book of business of an insurance company over a specified time interval. ...

Tax, under federal and state laws, on transfer of property made without payment or other value in exchange. ...

In property insurance coverages, provision whereby the limit of the policy automatically increases at each policy anniversary date, subject to the insured's rejection of such an increase. ...

Inquiry conducted by a committee of the legislature of the State of New York in 1905 that looked at abuses of life insurance companies operating in the state. This study led to stricter ...

Fidelity bond under which an insured employer is reimbursed for loss caused by the dishonest act of two or more employees named or listed in a schedule attached to the bond. The specific ...

Popular Insurance Questions